You Want to Use a Pop Up for Market Testing- Here’s Why

Market testing is the process that a business uses to test a product or service in a new market. Usually, that means a new location. Whether you’re an entrepreneur looking to get your idea off the ground, or an established brand expanding into new markets, there are big financial risks associated with growth. Market testing is an opportunity for you to perform low-risk experiments before committing to a prototype or new location.

Although market testing can employ a wide range of tactics, including digital campaigns, surveys, and other methods for qualitative research, we’re most interested in experimenting with new markets by providing a temporary presence. Brands, most commonly franchises, will utilize a pop-up shop to see if a specific location would be suitable for a permanent branch/ franchise. During their test, brands will look for market conditions like high traffic volume, pedestrian mix, and some level of sales metrics to determine if the market is receptive to their offerings.

Reasons to Perform a Market Test

You’re interested in acquiring a property, but you are uncertain if the market will be receptive to your brand.

You’re looking at leasing space near a competitive business- is there market saturation?

You’re launching a new product and need feedback before the official release.

You’re trying to decide between multiple properties.

You need proof of concept for funding from a bank or capital firm.

You want to test foot traffic or traffic flow from a transportation perspective.

You want to see if your store design/ experiential concept is functional and attractive in the market.

How Pop-Up Shops Help You Execute a Market Test

Pop up shops are experiential:

Pop up shops are a unique opportunity to connect with your customers in a one-on-one interaction. Their small footprints mean you’re physically closer which provides an intimate environment to collect quick and raw data. However, the real opportunity is creating fun and interesting programming to bring new people in and engage them on a personal level. You can learn more about how to create this sort of programming in our blog, Can High School Psychology Teach You About Experiential Retail?

Pop up shops are temporary:

If you want to develop a sense of urgency and exclusivity, temporary pop-ups create scarcity. If people know your shop won’t last long, they’re more likely to feel a sense of urgency about visiting to see what you’re all about and to find out if they’d like to be a customer at your future location.

In addition to creating buzz, the pop-up shop’s temporary nature means you may not need to conform to current zoning requirements in order to open shop. This gives you access to undeveloped areas and the negative space (in-between spaces like alleys) that may not be available to traditional tenants. That means property managers will be excited to work with you because you’re utilizing a parcel that wouldn’t normally generate revenue. You can learn more about how property managers monetize underutilized spaces in our post, Three Ways to Turn Your Vacant Parking Lot into a Cash Cow.

Pop up shops are mobile:

Pop up shops give you the flexibility to go out and find your target market. You don’t need to be in a building. You don’t even need to be on a street or sidewalk. Pop up shops can empower you to take advantage of underutilized and negative spaces in urban areas, popular neighborhoods, retail property, or at events. But the key here is that you could be in an urban area one week and a festival the next week. When you aren’t tied down by a lease, you can move your space to the next test market.

Pop up shops are inexpensive:

When it comes to the total cost of ownership, pop up shops are less expensive because they allow you to have physical presence without committing to renting in a specific place or paying to modify and up-fit each test location. Depending on the materials and structure you use for your pop-up shop, you could realize even more savings. What goes into the cost of a shipping container pop up? Glad you asked! Here’s our quick budgeting guide for pop up shops.

Pop up shops help to mitigate risk:

Because pop up shops are temporary, mobile, and inexpensive there’s little to no risk associated with activating the space. You aren’t committed to a land parcel, a retail property, or a long time-frame. If one market is less receptive, you can move onto the next one. But, if they love your space, pop-ups give you the flexibility to stay longer, maintain a connection with your customers, and generate early cash flow while your permanent space is being prepared. Shipping container pop up shops are excellent for interim cash flow and new construction situations because they keep you from needing to close for safety reason, they can be added onto existing buildings, or could be used in lieu of new construction. We talk about how that works in our article, A Business Case for Shipping Container Convenience Stores.

When the stakes are this high, it makes sense for businesses to test new markets before making large investments. There are lots of methods for performing a market test but pop up shops are beneficial if you’re looking for a solution that is experiential, temporary, mobile, inexpensive, and can mitigate risk. For more information on how our shipping container spaces can add a pop up for market testing to your portfolio, reach out via our contact form.

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